The present invention relates to a digital image watermarking apparatus and method. Luminance component of a digital image are transformed into coefficients of a frequency domain, and watermark is generated by encrypting a user key and generating pseudo random number from encrypted user key. Then, a replacement coefficient generated from a coefficient of a first frequency area and the watermark is replaced with a coefficient of a second frequency area so that the watermark is embedded into the digital image. The embedded watermark is extracted at an authenticating apparatus and the digital image is authenticated by finding the correlation between the extracted watermark and watermark for authentication.